I am a Senior Political Contributor at Forbes and the official 'token lefty,' as the title of the page suggests. However, writing from the 'left of center' should not be confused with writing for the left as I often annoy progressives just as much as I upset conservative thinkers. In addition to the pages of Forbes.com, you can find me every Saturday morning on your TV arguing with my more conservative colleagues on "Forbes on Fox" on the Fox News Network and at various other times during the week serving as a liberal talking head on other Fox News and Fox Business Network shows. I also serve as a Democratic strategist with Mercury Public Affairs.

With tempers and tantrums soaring in the wake of what is now, remarkably, being viewed by Rush Limbaugh and others as the greatest lie since Nixon covered up the Watergate caper, the anti-Obamacare forces are now seeking to spin their version of hard-core data into the confusion and disinformation that has long passed for analysis and discussion of the controversial ACA.

Sadly, that data remains as flawed and false as the seemingly never ending, overwrought cries of Obamacare fouls filling the airwaves of conservative America’s media outlets.

Let’s be clear—the President should never have issued his promise suggesting that “If you like your healthcare plan you can keep it.” Anyone who understands the topsy-turvy world of the individual health insurance marketplace, where annual turnover has long hovered at about 50 percent of all policies issued, had to know that many Americans would not be able to keep their existing policies, given the increased policy benefits required as a result of the ACA and the rocky nature of the individual policy business.

While the impact on those who are finding out that the President’s words were not quite on the money is confined to a small percentage of the population—3 to 5 percent—if you are one of those receiving a cancellation notice in the mail and think you had reason to like your pre-ACA policy, being a part of a small minority of Americans is cold comfort when you must go out and try to find a new policy at a similar price.

I have sympathy for those who are in this position. While some will find that they are going to have a happier ending as a result of losing their existing policies, I recognize that some will not.

But it would be disingenuous not to point out that had those who are now being affected by cancellation notices felt some semblance of empathy for that other minority of Americans counting in the millions—those who were either uninsurable or unable to afford healthcare coverage prior to Obamacare—maybe we would have been able to find a smoother transition to a healthcare system that works for all of us.

As the old saying goes, karma is a bitch.

Still, the point of healthcare reform should be to make the system work more effectively for everyone, leading me to wonder how an effort to improve the system for all Americans is ever going to be possible when so many are so committed to misinformation in their desire to hand their ‘side’ a win?

As exhibit “A” of the commitment on the part of some to use faulty and misguided data to politically persuade more than inform, I turn to the latest in a series of articles written by my Forbes colleague, Avik Roy, whereby—using a methodology developed by Avik and some of his friends at the Koch Bros. financed Manhattan Institute—Roy continues his efforts to quantify the severity of the alleged sticker shock being experienced as a result of the healthcare prices on the newly organized, if disastrously launched, healthcare exchanges.

In Avik’s latest offering, he announces that Obamacare is increasing individual market premiums by an average of 41 percent.

Based on those earlier estimates, I suppose we should view Roy’s latest tome suggesting an average increase of just 41 percent to be considerable progress.

However, faulty methodology is faulty methodology—and the Manhattan Institute approach is, in my opinion (added to original story), using truly faulty methodology.

As I have pointed out in previous articles discussing Roy’s conclusions, his numbers and projections are based on using the lowest teaser rates he can find for pre-Obamacare individual policies and then comparing them to the price for post-Obamacare policies found on the exchanges.

The problem is that teaser rates are just that—efforts by insurance companies to draw you in and make you a customer even if that first year comes as a loss-leader for the insurance company. Yet, even the most cursory review reveals that teaser rates have a funny way of going up dramatically and quickly, year-on-year, once you have purchased the policy. It is not unlike the cable TV or premium movie channel deals that offer you the first three months at a huge discount and then start hitting you with the full tab once you have signed the contract. Would anyone view those first three months of discounted HBO rates as the appropriate comparison point when seeking to determine the percentage increase in rates two years down the road?

And yet, this is precisely the methodology that is at the center of how Avik and his cohorts reach their shocking degree of premium price increases—despite the fact that these quotes are wholly irrelevant to what most paid in the pre-Obamacare individual market once the thrill of the teaser rate wore off.

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OK, I’ll give it a shot. There is an Insurance Commissioner in every state. For decades, they have had power to regulate health and other lines of insurance. Every single form that an insurer sends a beneficiary is approved by the Insurance Commissioner.

There’s no such thing as a “teaser rate”. Rates were guaranteed renewable as determined by the claims experience of the entire pool. Rather, it is known that people consume more medical care in the first year they become insured than when they were uninsured.

Furthermore, if people moved to the individual market after completing COBRA the insurers could not underwrite them. In California, for example, those individuals had to be offered the choice of the two most popular individual policies. If “bad apple” carriers figured out a way to close pools and squeeze sick people out, state legislators had the power to legislate against that.

Not all states legislated effectively against re-underwriting at renewal. However, if the individual market had been the market of first resort, not the residual market, the people would have demanded such legislation.

There’s no reason to believe that Congress is more competent than state legislatures at regulating health insurance. Recent experience suggests otherwise.

Kind of odd you choose to reference California where the Insurance Commissioner has less power than just about any state in the union. That said, I have to completely disagree when you say that insurers don’t have teaser rates. If rates were guaranteed renewable based on claims we would never see (a) policy cancellations and withdrawals from the marketplace and (b) annual increases in premium charges when the insured has not even submitted a claim over the previous year. You are not arguing that annual increases-across the board- are based on the claims record of the insured are you? If this is true, how do you explain everyone in a particular policy in a particular state getting a letter of identical increase-based on increased costs of healthcare rather than patient history?

As for the remainder of your comment, while it indicates that you certainly know the subject matter, it is difficult to see where it is relevant to the article.

John – I was one of those who moved to the individual market after COBRA was up. My price would have tripled for 2/3 the benefit. The plans will quickly term members who innocently left off pre-existing conditions off the plan info requested (did you forget that hangnail in 1996 – you’re fired.).

Are the members also responsible – in some cases yes. But the plans often take advantage of those who don’t know the way to play the games (and sometimes even those of us that do.).

I agree that California’s Insurance Commissioner has less power to review rates than those of most other states. However, prior approval of rates is not associated with lower rates. Please see http://tinyurl.com/mjub9fq. California’s rates for individual insurance were lower than other states’ because of it allowed good underwriting practices (pre-PPACA).

With respect to guaranteed renewal, what you are describing is the opposite of guaranteed renewal. If beneficiaries in the pool who have no medical claims do not experience an increase in premium, that is re-underwriting just as if those with medical claims have their premiums hiked by their own experience.

Guaranteed renewal with accurate underwriting means that everyone (without continuous coverage) is underwritten when they sign up, and that the rates for the entire pool go up at the same rate at renewal. That is the way it should be: Not re-underwriting each individual.

Plus, California deals harshly with insurers who wrongfully cancel policies. The most outstanding example was the award of $9 million against HealthNet for wrongfully cancelling a beneficiary’s policy after she was diagnosed with cancer (http://tinyurl.com/puw6fyn).

That $9 million was far more than HealthNet would have paid in oncology claims. The idea that the former market was some kind of unregulated Wild West is unfounded by any evidence.

“If rates were guaranteed renewable based on claims we would never see (a) policy cancellations and withdrawals from the marketplace”

Guaranteed renewable simply means the carrier cannot cancel that individual’s policy based on adverse claims experience. It does not prevent the carrier from terminating an entire group, e.g., holders of Policy X. So long as Policy X continues in force, guaranteed renewability gives an individual subscriber the option to renew at group rates rather than being re-underwritten and having to pay a new rate.

Please note it would be ILLEGAL under Obamacare for a carrier to continue offering Policy X after Jan. 1, 2014 if said policy did not conform to all the new Obamacare mandates being imposed as of that date. It is THIS rather than carefully targeted cancellations of policies for particular high-cost subscribers that we are now observing in the market. Thus, it is truly quite mendacious for progressives to be pointing to carriers and saying “well THEY are the ones cancelling policies. You can’t blame Obamacare for that” etc.

If you want a good education on how the non-group market could function had misguided tax policies for the last 60 years not relegated it to a residual market, read Mark Pauly’s Health Reform Without Side Effects: http://media.hoover.org/sites/default/files/documents/9780817910440_1.pdf

Finally, Scott Harrington has shown that rescissions affect only 1/2% of the market. Was this sometimes being abused? Probably, but certainly not enough to warrant the massive federal takeover of health insurance regulation in the individual and small group markets.

I have to completely disagree when you say that insurers don’t have teaser rates.

there are no teaser rates – that is rebating an is illegal

If rates were guaranteed renewable based on claims we would never see (a) policy cancellations and withdrawals from the marketplace and (b) annual increases in premium charges when the insured has not even submitted a claim over the previous year.

You are in a pool of like agegroups – even before ACA – asthe risk rises, so does the costs

You are not arguing that annual increases-across the board- are based on the claims record of the insured are you?

it is on pool risk and age induced risk

If this is true, how do you explain everyone in a particular policy in a particular state getting a letter of identical increase-based on increased costs of healthcare rather than patient history?

because insurance cost is at the effect of laws, regulations, mandates, provider costs, taxes, etc.

to view insurance as a static independant product is the basic mistake

as the recent cancellations point out HHS made up regulations, mandating multiple benefits and structures, and one regulation was that major changes to meet those regulations voided grandfathering

Rick, Jon Gruber has misinformed you and your readers on a few fronts. He knows that the Massachusetts Division of Insurance in Massachusetts has reported out that the ACA’s forced rating factor changes will cause premium spikes in the small group side of the merged market in the Commonwealth, while the rating factor changes will lower premiums for the individual side. To imply that the situation is the same as other states, is misguided at best. See for yourself: http://pioneerinstitute.org/healthcare/aca-premium-roller-coaster-for-small-business-coming-to-massachusetts/

Finally, the 2006 reform in Mass partially deregulated the individual market in the state, because the state legislature had messed it up so badly. The opposite is true under the ACA, since guarantee issue and modified community rating are new to most states. These had been on the books in Mass since 1996, and were not new under the 2006 law.

Josh – Actually, it was not my intent to suggest that the Mass. situation and circumstances would translate to other states. Having re-read the piece, i don’t believe I implied this. It was to make the point that a methodology that I believe is not what it should be creates aberrations on all sides, both raising and lowering the percentage increases and decreases. As for whether Gruber is wrong about the individual markets-maybe, but I’d be surprised as he stays pretty well on top of these things in MA. And no offense intended when I say that I have not found the Pioneer Institute to be the best possible source in the past.

Some of the policies you describe as crap could be good options for others. For example, a high deductible policy with lower monthly payments. If you have accumulated enough in savings to be able to comfortably cover a high deductible, and are healthy, this is a great plan for you. This type of plan also goes away under the ACA. Just like with my auto insurance, as my financial means have improved I have raised my deductibles to lower my monthly premiums. Just because these policies are bad for some doesn’t mean they should have been abolished.

You mention that we have lemon laws to protect buyers from bad cars. This is more like the government banning KIA’s because they are not as good as Toyota. Or, maybe more accurately, banning pick up trucks and forcing people to buy compact cars because they get better gas mileage and better gas mileage is good for people. For some people, paying more for gas using a truck is a better option than owning a compact. Some protections provided for by the government are good but the ACA takes it too far when it comes to policies.

Every source I have seen, both liberal and conservative, has agreed that premium rates are going up. I would love to see numbers that contradict that. And no, subsidies don’t actually reduce premiums, they just shift who pays for them. So if you have any hard data that the actual average premiums charged by insurance companies is going down I would appreciate you providing them.

No, I am not judging policies as ‘crap’ because of the size of the deductible. I’m talking about policies that omit coverage for some very important things – like hospitalization!- and don’t tell you that in a way you can understand when you buy the policy. I get high-deductible policies and always viewed them as a good option for younger people with time to build their HSA accounts. However, they are not so good for older people without the time to build the HSA so they are prepared to deal with the finances of a serious health issue. As for premium rates, both liberals and conservatives should be agreeing that premium rates will go up for some and down for others. My own insurance rate, for example, will be going down substantially. This is the result, in part, of my age. Pre-Obamacare, I could be charged 5 to 10 times as much as the lowest cost plan for the youngest and healthiest. Additionally, because of my pre-existing conditions, i faced real issues in even getting covered. Also, because i live in New York where the rates have gone down dramatically, it will now cost me roughly 40 percent less to buy the same benefits I have had in the past. This is not to say that younger and healthier people-who earn a living that puts them above the level to qualify for subsidies-will not pay more. They will. The good news for them is that they will some day be as old as me and will get the benefits of lower premiums at that time.

Rick – I agree that much of the ballyhoo regarding ObamaCare is misguided. If I can ever get through to enroll, I expect my premiums to drop by almost half vs. my current independent policy. Why – my family was rated as high risk, including my wife who had been to the doctor once outside her annual exam in 3 years. The insurance companies sometimes can and do take advantage of members, especially those who do not know how to navigate the system. On the other hand, someone who chooses to go with a $5000 hi deductible plan with a low premium should not have that right taken away because the plan is not the right metal. More of these plan terminations will occur next year as SMB roll into the exchanges.